What changed in this filing

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Item 1. Financial Statements

2025-05-13 compared with 2024-11-12 · 361 added, 303 removed, 66 unchanged (91% of the section changed)

Financial Statements (Unaudited)

CORE ETHEREUM ETF

OF ASSETS AND LIABILITIES

Investment in ether, at fair value (cost $ 15,805,033 )

Net assets consist of

21Shares Core Ethereum ETF

STATEMENTS OF ASSETS AND LIABILITIES

Investment in ether, at fair value (cost $ 13,469,961 and $ 15,551,512 respectively)

Sponsor fee payable

Total liabilities

Commitments and contingent liabilities (Note 9)

Net assets consists of

Paid-in-capital

Accumulated earnings

Accumulated earnings (loss)

( 5,474,903 )

1 unchanged sentence

Net asset value per share

* No comparative statement has been provided as this is the first fiscal year of the Trust’s operations.

accompanying notes are an integral part of the Financial Statements.

CORE ETHEREUM ETF

OF INVESTMENT

September 30, 2024*

The accompanying notes are an integral part of the financial

21Shares Core Ethereum ETF

SCHEDULES OF INVESTMENT

March 31, 2025 (Unaudited)

Investment in ether

Total investments

Liabilities in excess

of other assets

* No comparative period presented as the Trust did not hold any ether as of December 31, 2023.

accompanying notes are an integral part of the Financial Statements.

CORE ETHEREUM ETF

OF OPERATIONS

the three months ended

September 30,

the period May 1, 2024 (date of initial seeding) through September 30, 2024*

waiver and reimbursement

investment loss

Realized and change in unrealized

Net realized gain (loss)

on investment in ether

change in unrealized appreciation (depreciation) on investment in ether

( 3,223,608 )

( 3,222,047 )

Liabilities in excess of other assets

December 31, 2024

Investment in ether

Total investments

Liabilities in excess of other assets

The accompanying notes are an integral part of the financial statements.

21Shares Core Ethereum ETF

STATEMENT OF OPERATIONS

Investment income

Total expenses

Less waiver and reimbursement

Net investment loss

Realized and change in unrealized gain (loss)

Net realized loss on investment in ether sold for redemptions

( 3,476,102 )

Net change in unrealized depreciation on investment in ether

( 6,380,524 )

increase (decrease) in net assets resulting from operations

Net change in unrealized gain on Sponsor fee payable

Net realized and change in unrealized gain (loss)

( 9,855,103 )

Net decrease in net assets resulting from operations

$ ( 9,861,010 )

* No prior year comparative statement has been provided as this is the first fiscal year of the Trust’s operations.

accompanying notes are an integral part of the Financial Statements.

CORE ETHEREUM ETF

OF CHANGES IN NET ASSETS

the three months ended

the period May 1, 2024 (date of initial seeding) through September 30, 2024*

* No prior year comparative statement has been provided since the Trust did not have operations as of March 31, 2024.

The accompanying notes are an integral part

of the financial statements.

21Shares Core Ethereum ETF

STATEMENT OF CHANGES IN NET ASSETS

Net assets, beginning of period

Contributions for Shares

Distributions for Shares

Contributions for Shares issued

Distributions for Shares redeemed

( 5,676,037 )

Net investment loss

Net realized gain (loss)

on investment in ether

change in unrealized appreciation (depreciation) on investment in ether

Net realized loss on investment in ether sold for redemptions

( 3,476,102 )

Net change in unrealized depreciation on investment in ether

( 6,380,524 )

Net change in unrealized gain on Sponsor fee payable

Net assets, end of period

2 unchanged sentences

Shares redeemed

increase in Shares issued

* No prior year comparative statement has been provided as this is the first fiscal year of the Trust’s operations.

accompanying notes are an integral part of the Financial Statements.

Net decrease in Shares issued and outstanding

* No prior year comparative statement has been provided since the Trust did not have operations as of March 31, 2024.

The accompanying notes are an integral part

of the financial statements.

Core Ethereum ETF

11 unchanged sentences

and Anchorage Digital Bank N.A (“Anchorage”, and, together with Coinbase and BitGo, as the context may require, the “Custodian”,

“Custodians” and each a “Custodian”), are the custodians for the Trust and will hold all of the Trust’s

ether on the Trust’s behalf.

The transfer agent (the “Transfer Agent”) and the administrator for the Trust (the “Administrator”)

is Bank of New York Mellon.

Trust is an exchange-traded fund (“ETF”) that issues units of beneficial interest (the “Shares”) representing

fractional undivided beneficial interests in its net assets that trade on the Cboe BZX Exchange, Inc.

“Custodians” and each a “Custodian”), are the Custodians for the Trust and hold all of the Trust’s ether

on the Trust’s behalf.

The transfer agent (the “Transfer Agent”), the administrator for the Trust (the “Administrator”),

and the cash custodian (the “Cash Custodian”), is Bank of New York Mellon.

The Trust is an exchange-traded

fund that issues units of beneficial interest (the “Shares”) representing fractional undivided beneficial interests in its

net assets that trade on the Cboe BZX Exchange, Inc.

(the “Exchange”).

Shares were listed for trading on the Exchange on July 23, 2024, under the ticker symbol “CETH”.

Trust’s investment objective is to seek to track the performance of ether, as measured by the performance of the CME CF Ether-Dollar Reference

Rate — New York Variant (the “Index”), adjusted for the Trust’s expenses and other liabilities.

Benchmarks Ltd.

is the administrator for the Index (the “Index Provider”).

The Index is designed to reflect the performance

of ether in U.S.

In seeking to achieve its investment objective, the Trust holds ether at its Custodians and values its Shares

daily based on the Index.

Trust is an “emerging growth company” as that term is used in the Securities Act of 1933, as amended (the “Securities

Act”), and, as such, the Trust may elect to comply with certain reduced public company reporting requirements.

The Shares were listed for trading on the Exchange

on July 23, 2024, under the ticker symbol “CETH”.

The Trust’s investment

objective is to seek to track the performance of ether, as measured by the performance of the CME CF Ether-Dollar Reference Rate —

New York Variant (the “Index”), adjusted for the Trust’s expenses and other liabilities.

CF Benchmarks Ltd.

is the administrator

for the Index (the “Index Provider”).

The Index is designed to reflect the performance of ether in U.S.

to achieve its investment objective, the Trust holds ether at its Custodians and values its Shares daily based on the Index.

The Trust is an “emerging

growth company” as that term is used in the Securities Act of 1933, as amended (the “Securities Act”), and, as such,

the Trust may elect to comply with certain reduced public company reporting requirements.

The Sponsor served as the

1 unchanged sentence

On May 1, 2024, the Sponsor, in its capacity as Seed Capital Investor, subject to certain

conditions, purchased 2 Shares at a per-Share price of $ 50.00 (the “Initial Seed Creation Baskets”).

Total proceeds to the

Trust from the sale of these Initial Seed Creation Baskets were $ 100 .

Delivery of the Seed Creation Baskets was made on May 1, 2024.

On June 18, 2024 (the

“Seed Capital Purchase Date”), 21Shares US LLC, in its capacity as Seed Capital Investor, purchased the Seed Creation Baskets

comprising 20,000 Shares (the “Seed Creation Baskets”).

In its capacity as the Seed Capital Investor, 21Shares US LLC

has acted as a statutory underwriter in connection with this purchase.

The total proceeds to the Trust from the sale of the Seed Creation

Baskets were $ 340,739 .

On June 18, 2024, the Trust purchased ether with the proceeds of the Seed Creation Baskets by transacting

with an Ether Counterparty to acquire ether on behalf of the Trust in exchange for cash provided by 21Shares US LLC in its capacity as

Seed Capital Investor.

All ether acquired in connection with the Seed Creation Baskets is held by the one or more of the Custodians.

statement of assets and liabilities and schedule of investment on September 30, 2024, and the statements of operations, and changes in

net assets for the three months ended September 30, 2024 and the period from May 1, 2024 to September 30, 2024, have been prepared on

behalf of the Trust and are unaudited.

In the opinion of management of the Sponsor of the Trust, all adjustments (which include normal

recurring adjustments) necessary to present fairly the financial position and results of operations for the period ended September 30,

2024, and for all interim periods presented have been made.

In addition, interim period results are not necessarily indicative of results

for a full-year period.

fiscal year-end of the Trust is December 31st.

conditions, purchased 2 Shares at a per-Share price of $ 50.00 (the “Initial Seed Shares”).

Total proceeds to the Trust from

the sale of these Initial Seed Shares were $ 100 .

Delivery of the Seed Shares were made on May 1, 2024.

On June 18, 2024 (the “Seed

Capital Purchase Date”), the Sponsor, in its capacity as Seed Capital Investor, purchased the Seed Creation Baskets comprising 20,000

Shares (the “Seed Creation Baskets”).

In its capacity as the Seed Capital Investor, the Sponsor, has acted as a statutory

underwriter in connection with this purchase.

The total proceeds to the Trust from the sale of the Seed Creation Baskets were $ 340,739 .

On June 18, 2024, the Trust purchased ether with the proceeds of the Seed Creation Baskets by transacting with an Ether Counterparty to

acquire ether on behalf of the Trust in exchange for cash provided by the Sponsor, in its capacity as Seed Capital Investor.

acquired in connection with the Seed Creation Baskets is held by the one or more of the Custodians.

The statements of assets and

liabilities and schedules of investment on March 31, 2025, and the statement of operations, and changes in net assets for the three months

ended March 31, 2025, have been prepared on behalf of the Trust and are unaudited.

In the opinion of management of the Sponsor of the

Trust, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position and results of

operations for the period ended March 31, 2025, and for all interim periods presented have been made.

In addition, interim period results

are not necessarily indicative of results for a full-year period.

The fiscal year-end of the

Trust is December 31st.

Significant Accounting Policies

of Accounting

Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US

GAAP” or “GAAP”).

Trust qualifies as an investment company solely for accounting purposes and not for any other purpose and follows the accounting and

reporting guidance under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)

Topic 946, Financial Services - Investment Companies, but is not registered, and is not required to be registered, as an investment company

under the Investment Company Act of 1940, as amended.

The Trust uses fair value as its method of accounting for ether in accordance with

its classification as an investment company for accounting purposes.

preparation of the financial statement in conformity with US GAAP requires the Trust to make estimates and assumptions that affect the

reported amounts of assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during

the reporting period.

Actual results may differ materially from such estimates as additional information becomes available or actual

amounts may become determinable.

Should actual results differ from those previously recognized, the recorded estimates will be revised

accordingly with the impact reflected in the operating results of the Trust in the reporting period in which they become known.

includes non-interest bearing, non-restricted cash maintained with one financial institution that does not exceed U.S.

federally insured

Trust did not hold any cash at September 30, 2024.

GAAP defines fair value as the price the Trust would receive to sell an asset or pay to transfer a liability in an orderly transaction

between market participants at the measurement date.

Basis of Accounting

The financial statements have

been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP” or “GAAP”).

The Trust qualifies as an

investment company solely for accounting purposes and not for any other purpose and follows the accounting and reporting guidance under

the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial

Services - Investment Companies, but is not registered, and is not required to be registered, as an investment company under the Investment

Company Act of 1940, as amended.

The Trust uses fair value as its method of accounting for ether in accordance with its classification

as an investment company for accounting purposes.

The preparation of the financial

statements in conformity with US GAAP requires the Trust to make estimates and assumptions that affect the reported amounts of assets

and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results may differ materially from such estimates as additional information becomes available or actual amounts may become determinable.

Should actual results differ from those previously recognized, the recorded estimates will be revised accordingly with the impact reflected

in the operating results of the Trust in the reporting period in which they become known.

Cash includes non-interest

bearing, non-restricted cash maintained with one financial institution that does not exceed U.S.

federally insured limits.

Investment Valuation

US GAAP defines fair value

as the price the Trust would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants

at the measurement date.

The Trust’s policy is to value investments held at fair value.

Trust identifies and determines the ether principal market (or in the absence of a principal market, the most advantageous market) for

GAAP purposes consistent with the application of the fair value measurement framework in FASB ASC 820.

A principal market is the market

with the greatest volume and activity level for the asset or liability.

The determination of the principal market will be based on the

market with the greatest volume and level of activity that can be accessed.

The Trust identifies and determines

the ether principal market (or in the absence of a principal market, the most advantageous market) for GAAP purposes consistent with the

application of the fair value measurement framework in FASB ASC 820 – Fair Value Measurement.

A principal market is the market with

the greatest volume and activity level for the asset or liability.

The determination of the principal market will be based on the market

with the greatest volume and level of activity that can be accessed.

The Trust obtains relevant volume and level of activity information

4 unchanged sentences

The Trust will update its principal market analysis periodically and as needed to the extent

that events have occurred, or activities have changed in a manner that could change the Trust’s determination of the principal

inputs are used in determining the fair value of assets and liabilities.

Inputs may be based on independent market data (“observable

inputs”) or they may be internally developed (“unobservable inputs”).

These inputs are categorized into a disclosure

hierarchy consisting of three broad levels for financial reporting purposes.

The level of a value determined for an asset or liability

within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety.

The three levels of the fair value hierarchy are as follows:

Unadjusted quoted prices in active markets for identical assets or liabilities;

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly,

including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities

in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and

inputs that are derived principally from or corroborated by observable market data by correlation or other means;

Unobservable inputs, including the Trust’s assumptions used in determining the fair value of investments, where there is little

or no market activity for the asset or liability at the measurement date.

Value Measurement Using

September 30, 2024

comparative table has been provided as this is the first fiscal year of the Trust’s

cost basis of the investment in ether recorded by the Trust for financial reporting purposes is the fair value of ether at the time of

The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the

corresponding Shares to investors.

Trust considers investment transactions to be the receipt of ether for Share creations and the delivery of ether for Share redemptions

or for payment of expenses in ether.

The Trust records its investments transactions on a trade date basis and changes in fair value are

reflected as net change in unrealized appreciation or depreciation on investments.

Realized gains and losses are calculated using the

specific identification method.

Realized gains and losses are recognized in connection with transactions including settling obligations

for the Sponsor’s Fee in ether.

of Net Asset Value (NAV) and NAV per Share

each day other than a Saturday or Sunday, or a day on which Cboe BZX Exchange is closed for regular trading (a “Business Day”),

as soon as practicable after 4:00 p.m.

(Eastern Time), the net asset value of the Trust is obtained by subtracting all accrued fees,

expenses and other liabilities of the Trust from the fair value of the ether and other assets held by the Trust.

The Trustee computes

the net asset value per Share by dividing the net asset value of the Trust by the number of Shares outstanding on the date the computation

Sponsor and the Trustee will treat the Trust as a “grantor trust” for U.S.

that events have occurred, or activities have changed in a manner that could change the Trust’s determination of the principal market.

Various inputs are used in

determining the fair value of assets and liabilities.

Inputs may be based on independent market data (“observable inputs”)

or they may be internally developed (“unobservable inputs”).

These inputs are categorized into a disclosure hierarchy consisting

of three broad levels for financial reporting purposes.

The level of a value determined for an asset or liability within the fair value

hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety.

The three levels

of the fair value hierarchy are as follows:

Unadjusted quoted prices in

active markets for identical assets or liabilities;

Inputs other than quoted prices

included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar

assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered

to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally

from or corroborated by observable market data by correlation or other means;

Unobservable inputs, including

the Trust’s assumptions used in determining the fair value of investments, where there is little or no market activity for the asset

or liability at the measurement date.

Fair Value Measurement Using

March 31, 2025 (Unaudited)

Investment in ether

Fair Value Measurement Using

December 31, 2024

Investment in ether

The cost basis of the investment

in ether recorded by the Trust for financial reporting purposes is the fair value of ether at the time of purchase.

The cost basis recorded

by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.

Investment Transactions

The Trust considers investment transactions to

be the receipt of ether for Share creations and the delivery of ether for Share redemptions or for payment of expenses in ether.

records its investments transactions on a trade date basis and changes in fair value are reflected as net change in unrealized appreciation

or depreciation on investments.

Realized gains and losses are calculated using the specific identification method.

Realized gains and

losses are recognized in connection with transactions including redemption of shares and settling obligations for the Sponsor’s

Fee in ether.

Calculation of Net Asset Value (“NAV”)

and NAV per Share

On each day other than when

the Exchange is closed for regular trading (a “Business Day”), as soon as practicable after 4:00 p.m.

(Eastern Time), the

net asset value of the Trust is obtained by subtracting all accrued fees, expenses and other liabilities of the Trust from the fair value

of the ether and other assets held by the Trust.

The Trustee computes the NAV per Share by dividing the NAV of the Trust by the number

of Shares outstanding on the date the computation is made.

Federal Income Taxes

The Sponsor and the Trustee

will treat the Trust as a “grantor trust” for U.S.

federal income tax purposes.

Although not free

from doubt due to the lack of directly governing authority, if the Trust operates as expected, the Trust should be classified as a “grantor

trust” for U.S.

Although not free from doubt due to the lack

of directly governing authority, if the Trust operates as expected, the Trust should be classified as a “grantor trust” for

federal income tax purposes and the Trust itself should not be subject to U.S.

federal income tax.

Each beneficial

owner of Shares will be treated as directly owning its pro rata Share of the Trust’s assets and a pro rata portion of the Trust’s

income, gain, losses and deductions will “flow through” to each beneficial owner of Shares.

If the Trust sells ether (for

example, to pay fees or expenses), such a sale is a taxable event to Shareholders.

Upon a Shareholder’s sale of its Shares, the

Shareholder will be treated as having sold the pro rata share of the ether held in the Trust at the time of the sale and may recognize

gain or loss on such sale.

The Sponsor has reviewed the tax positions as of September 30, 2024, and has determined that no provision

for income tax is required in the Trust’s financial statements.

Issued Accounting Pronouncements

December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-08, Intangibles—Goodwill and Other—Crypto

Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”).

ASU 2023-08 is intended to

improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period

with changes in fair value recognized in net income.

The amendments also improve the information provided to investors about an entity’s

crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting

ASU 2023-08 is effective for annual and interim reporting periods beginning after December 15, 2024.

Early adoption is permitted

for both interim and annual financial statements that have not yet been issued.

The Trust adopted this new guidance with no material

impact on its financial statements and disclosures as the Trust uses fair value as its method of accounting for ether in accordance with

its classification as an investment company for accounting purposes.

Each beneficial owner of Shares

will be treated as directly owning its pro rata Share of the Trust’s assets and a pro rata portion of the Trust’s income,

gain, losses and deductions passed through to each beneficial owner of Shares.

If the Trust sells ether (for example, to pay fees or expenses),

such a sale is a taxable event to Shareholders.

Upon a Shareholder’s sale of its Shares, the Shareholder will be treated as having

sold the pro rata share of the ether held in the Trust at the time of the sale and may recognize gain or loss on such sale.

has reviewed the tax positions as of March 31, 2025, and has determined that no provision for income tax is required in the Trust’s

financial statements.

Segment Reporting

Trust operates in one segment.

The segment derives its revenues from Trust investments made in accordance with the defined investment

strategy of the Trust, as prescribed in the Trust’s prospectus.

The Chief Operating Decision Maker (“CODM”) is the

The CODM monitors the operating results of the Trust.

The financial information that the CODM leverages to assess the segment’s

performance and to make decisions for the Trust’s single segment, is consistent with the financial information that is presented

within the Trust’s financial statements.

Segment assets are reflected on the accompanying Statements of Assets and Liabilities as Total assets and the only significant segment

expense, the Sponsor fee, is included in the accompanying Statement of Operations.

Fair Value of Ether

following represents the changes in quantity of ether and the respective fair value on September 30, 2024*:

Beginning balance as

of May 1, 2024

Ether contributed

Ether distributed for Sponsor’s Fee

Net realized gain (loss) on investment in ether

Change in unrealized

appreciation (depreciation) on investment in ether

The following represents the

changes in quantity of ether and the respective fair value on March 31, 2025 (Unaudited) and December 31, 2024:

Beginning balance as of January 1, 2025

Ether purchased

( 3,049.1610 )

Ending balance as of

September 30, 2024*

* No comparative table has been provided as this is the first fiscal year of the Trust’s operations.

Trust pays the unitary Sponsor Fee of 0.21 % of the Trust’s ether holdings.

The Sponsor Fee is paid by the Trust to the Sponsor

as compensation for services performed under the Trust Agreement.

The Sponsor agreed to waive the entire Sponsor Fee for (i) a six-month

period which commenced on July 23, 2024 (the day the Trust’s Shares were initially listed on the Exchange), or (ii) the first $ 500

million of Trust assets, whichever came first.

Sponsor has agreed to pay all operating expenses (except for litigation expenses and other extraordinary expenses) out of the Sponsor

Operating expenses assumed by the Sponsor include;

(i) the Marketing Fee, (ii) fees to the administrator, if any, (iii) fees to

the ether Custodians, (iv) fees to the Transfer Agent, (v) fees to the Trustee, (vi) the fees and expenses related to any future listing,

trading or quotation of the Shares on any listing exchange or quotation system (including legal, marketing and audit fees and expenses),

(vii) ordinary course legal fees and expenses but not litigation-related expenses, (viii) audit fees, (ix) regulatory fees, including,

if applicable, any fees relating to the registration of the Shares under the 1933 Act or Exchange Act, (x) printing and mailing costs;

(xi) costs of maintaining the Trust’s website and (xii) applicable license fees (each, a “Sponsor-paid Expense,” and

together, the “Sponsor-paid Expenses”), provided that any expense that qualifies as an Additional Trust Expense (as defined

below) will be deemed to be an Additional Trust Expense and not a Sponsor-paid Expense.

Sponsor will not, however, assume certain extraordinary, non-recurring expenses that are not Sponsor-paid Expenses, including, but not

limited to, taxes and governmental charges, expenses and costs of any extraordinary services performed by the Sponsor (or any other service

provider) on behalf of the Trust to protect the Trust or the interests of Shareholders, any indemnification of the ether Custodians, Administrator

or other agents, service providers or counter-parties of the Trust, the fees and expenses related to the listing, and extraordinary legal

fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation

matters (collectively, “Additional Trust Expenses”).

Of the Sponsor-paid Expenses, ordinary course legal fees and expenses

shall be subject to a cap of $ 100,000 per annum.

In the Sponsor’s sole discretion, all or any portion of a Sponsor-paid Expense

may be re-designated as an Additional Trust Expense.

the extent that the Sponsor does not voluntarily assume expenses, they will be the responsibility of the Trust.

The Sponsor also pays

the costs of the Trust’s organization and offering.

The Trust is not obligated to repay any such costs related to the Trust’s

organization and offering paid by the Sponsor.

( 5,676,038 )

Net realized gain on investment in ether sold to pay Sponsor fee

Net realized gain (loss) on investment in ether sold for redemptions

( 3,476,102 )

Change in unrealized depreciation on investment in ether

( 6,380,524 )

Ending balance as of March 31, 2025 *

Beginning balance as of May 1, 2024 (date of initial seeding)

Ether purchased

( 4,000.0000 )

( 15,109,007 )

Net realized gain on investment in ether sold to pay Sponsor fee

Net realized gain on investment in ether sold for redemptions

Change in unrealized appreciation on investment in ether

Ending balance as of December 31, 2024

Trust Expenses

The Trust pays the

unitary Sponsor Fee of 0.21 % of the Trust’s ether holdings.

The Sponsor Fee is paid by the Trust to the Sponsor as

compensation for services performed under the Trust Agreement.

The Sponsor agreed to waive the entire Sponsor Fee for (i) a

six-month period which commenced on July 23, 2024 (the day the Trust’s Shares were initially listed on the Exchange), or (ii)

the first $ 500 million of Trust assets, whichever came first.

The six-month waiver period ended on January 23, 2025, at which time

the Sponsor began collecting the Sponsor Fee.

Except for during periods in which the Sponsor Fee is being waived, the Sponsor Fee

accrues daily and is payable in ether weekly in arrears.

The Administrator calculates the Sponsor Fee on a daily basis by applying a

0.21 % annualized rate to the Trust’s total ether holdings, and the amount of ether payable in respect of each daily accrual is

determined by reference to the Index.

The Trust incurred Sponsor Fee for the quarter ended March 31, 2025 of $ 5,907 , net of the Sponsor Fee waived of $ 2,169 .

The Sponsor has agreed to

pay all operating expenses (except for litigation expenses and other extraordinary expenses) out of the Sponsor Fee.

Operating expenses

assumed by the Sponsor include;

(i) the fee payable to marketing agents for services provided to the Trust (the “Marketing Fee”),

(ii) fees to the Administrator, if any, (iii) fees to the ether Custodians, (iv) fees to the Transfer Agent, (v) fees to the Trustee,

(vi) the fees and expenses related to any future listing, trading or quotation of the Shares on any listing exchange or quotation system

(including legal, marketing and audit fees and expenses), (vii) ordinary course legal fees and expenses but not litigation-related expenses,

(viii) audit fees, (ix) regulatory fees, including, if applicable, any fees relating to the registration of the Shares under the Securities

Act or Exchange Act, (x) printing and mailing costs;

(xi) costs of maintaining the Sponsor’s website and (xii) applicable license

fees (each, a “Sponsor-paid Expense,” and together, the “Sponsor-paid Expenses”), provided that any expense that

qualifies as an Additional Trust Expense (as defined below) will be deemed to be an Additional Trust Expense and not a Sponsor-paid Expense.

The Sponsor will not, however,

assume certain extraordinary, non-recurring expenses that are not Sponsor-paid Expenses, including, but not limited to, taxes and governmental

charges, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust

to protect the Trust or the interests of Shareholders, any indemnification of the ether Custodians, Administrator or other agents, service

providers or counter-parties of the Trust, the fees and expenses related to the listing, and extraordinary legal fees and expenses, including

any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters (collectively, “Additional

Trust Expenses”).

Of the Sponsor-paid Expenses, ordinary course legal fees and expenses shall be subject to a cap of $ 100,000 per

In the Sponsor’s sole discretion, all or any portion of a Sponsor-paid Expense may be re-designated as an Additional Trust

To the extent that the Sponsor

does not voluntarily assume expenses, they will be the responsibility of the Trust.

The Sponsor also pays the costs of the Trust’s

organization and offering.

The Trust is not obligated to repay any such costs related to the Trust’s organization and offering paid

by the Sponsor.

Creation and Redemption of Shares

Trust creates and redeems Shares on a continuous basis but only in Creation Units consisting of 10,000 Shares or multiples thereof.

Authorized Participants, which are registered broker-dealers who have entered into written agreements with the Sponsor and the Administrator,

can place orders.

The Trust engages in ether transactions for converting cash into ether (in association with purchase orders) and ether

into cash (in association with redemption orders).

The Trust conducts its ether purchase and sale transactions by, in its sole discretion,

choosing to trade directly with third parties (each, an “ether Trading Counterparty”), who are not registered broker-dealers

pursuant to written agreements between such ether Trading Counterparties and the Trust, or choosing to trade through the Prime Broker

acting in an agency capacity with third parties such as through its Coinbase Prime service pursuant to the Prime Broker Agreement.

ether Trading Counterparty may be an affiliate of an Authorized Participant.

Authorized Participants deliver only cash to create Shares and receive only cash when redeeming Shares.

Further, Authorized Participants

will not directly or indirectly purchase, hold, deliver, or receive ether as part of the creation or redemption process or otherwise

direct the Trust or a third-party with respect to purchasing, holding, delivering, or receiving ether as part of the creation or redemption

Trust creates Shares by receiving ether from a third-party that is not the Authorized Participant and the Trust—not the Authorized

Participant—is responsible for selecting the third-party to deliver the ether.

Further, the third-party will not be acting as an

agent of the Authorized Participant with respect to the delivery of the ether to the Trust or acting at the direction of the Authorized

Participant with respect to the delivery of the ether to the Trust.

The Trust redeems shares by delivering ether to a third-party that

is not the Authorized Participant and the Trust—not the Authorized Participant—is responsible for selecting the third-party

to receive the ether.

Further, the third-party will not be acting as an agent of the Authorized Participant with respect to the receipt

of the ether from the Trust or acting at the direction of the Authorized Participant with respect to the receipt of the ether from the

The third-party is unaffiliated with the Trust and the Sponsor.

September 30,

the period May 1, 2024 (date of initial seeding) through September 30, 2024*

Activity in Capital Transactions Issued and

The Trust creates and redeems

Shares on a continuous basis but only in Creation Baskets consisting of 10,000 Shares or multiples thereof on the NAV of the date of the

creation or redemption.

Only Authorized Participants, which are registered broker-dealers who have entered into written agreements with

the Sponsor and the Administrator, can place orders.

The Trust engages in ether transactions for converting cash into ether (in association

with purchase orders) and ether into cash (in association with redemption orders).

The Trust conducts its ether purchase and sale transactions

by, in its sole discretion, choosing to trade directly with third parties (each, an “ether Trading Counterparty”), who are

not registered broker-dealers pursuant to written agreements between such ether Trading Counterparties and the Trust, or choosing to trade

through the Prime Broker acting in an agency capacity with third parties such as through its Coinbase Prime service pursuant to the Prime

Broker Agreement.

An ether Trading Counterparty may be an affiliate of an Authorized Participant.

The Authorized Participants

deliver only cash to create Shares and receive only cash when redeeming Shares.

Further, Authorized Participants will not directly or

indirectly purchase, hold, deliver, or receive ether as part of the creation or redemption process or otherwise direct the Trust or a

third-party with respect to purchasing, holding, delivering, or receiving ether as part of the creation or redemption process.

The Trust creates Shares by

receiving ether from a third-party that is not the Authorized Participant and the Trust—not the Authorized Participant—is

responsible for selecting the third-party to deliver the ether.

Further, the third-party will not be acting as an agent of the Authorized

Participant with respect to the delivery of the ether to the Trust or acting at the direction of the Authorized Participant with respect

to the delivery of the ether to the Trust.

The Trust redeems shares by delivering ether to a third-party that is not the Authorized Participant

and the Trust—not the Authorized Participant—is responsible for selecting the third-party to receive the ether.

third-party will not be acting as an agent of the Authorized Participant with respect to the receipt of the ether from the Trust or acting

at the direction of the Authorized Participant with respect to the receipt of the ether from the Trust.

The third-party is unaffiliated

with the Trust and the Sponsor.

Activity in Capital Transactions Issued and Redeemed:

Shares issued

Shares redeemed

Net Change in Capital

Transactions Issued and Redeemed

September 30,

the period May 1, 2024 (date of initial seeding) through September 30, 2024*

Activity in Capital Transactions Issued and

Net Change in Capital Transactions Issued and Redeemed

* No prior year comparative statement has been provided since the Trust did not have operations as of March 31, 2024.

Activity in Capital Transactions Issued and Redeemed:

Shares issued

Shares redeemed

Net Change in Capital

Transactions Issued and Redeemed

* No prior year comparative table has been provided as this is the first fiscal year of the Trust’s operations.

( 5,676,037 )

Net Change in Capital Transactions Issued and Redeemed

* No prior year comparative statement has been provided since the Trust did not have operations as of March 31, 2024.

Ether purchased payable represents

the quantity of ether purchased for the creation of Shares where the ether has not yet settled.

Generally, ether is transferred within

two Business Days of the trade date.

Ether purchased payable

sold receivable represents the quantity of ether sold for the redemption of Shares where the ether has not yet been settled.

ether is transferred within two Business Days of the trade date.

Ether sold receivable

Related Parties

Sponsor is a related party to the Trust.

The Trust’s operations are supported by its Sponsor, who is in turn supported by its parent

company and affiliated companies and external service providers.

of September 30, 2024, the Sponsor owned 20,000 Shares of the Trust.

Sponsor arranged for the creation of the Trust and is responsible for the ongoing registration of the Shares for their public offering

in the United States and the listing of Shares on the Exchange.

The Sponsor is a related party

to the Trust.

The Trust’s operations are supported by its Sponsor, who is in turn supported by its parent company and affiliated

companies and external service providers.

As of March 31, 2025, the

Sponsor owned 20,000 Shares of the Trust.

The Sponsor arranged for the

creation of the Trust and is responsible for the ongoing registration of the Shares for their public offering in the United States and

the listing of Shares on the Exchange.

Financial Highlights

Share Performance (for a Share outstanding throughout each period presented)

the three months ended September 30, 2024*

the period May 1, 2024 (date of initial seeding) through September 30, 2024*

Net asset value per Share, beginning

Net investment loss 2

Net realized and change

in unrealized loss on investment in ether

change in net assets from operations

Net asset value per Share,

end of period

Total return, at net

asset value 3

Ratio to average net

Per Share Performance (for a Share

outstanding throughout the period presented)

Net asset value per Share, beginning of period

Net investment loss 1

Net realized and change in unrealized gain (loss) on investment in ether 2

Net change in net assets from operations

Net asset value per Share, end of period

Total return, at net asset value 3,5

Ratio to average net assets 4

Net investment income (loss)

Gross expenses

* No prior year comparative period presented as this is the first fiscal year of the Trust’s operations.

amount represents the NAV per Share on June 18, 2024, the Seed Capital Purchase Date.

* No prior year comparative statement has been provided since the Trust did not have operations as of March 31, 2024.

1 Calculated using average Shares outstanding.

2 The amount shown for a share outstanding throughout the period may not agree with the change in the aggregate gains and losses for the period because of the timing of sales and repurchases of the Trust’s shares in relation to fluctuating market values for the Trust.

3 Total return is calculated based on the change in value during the period and is not annualized.

1 unchanged sentence

4 Annualized.

5 Not annualized.

Commitments and Contingent Liabilities

the normal course of business, the Trust may enter into contracts that contain a variety of general indemnification clauses.

maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust which have

not yet occurred and cannot be predicted with any certainty.

However, the Sponsor believes the risk of loss under these arrangements

to be remote.

In the normal course of business, the Trust may

enter into contracts that contain a variety of general indemnification clauses.

The Trust’s maximum exposure under these arrangements

is unknown as this would involve future claims that may be made against the Trust which have not yet occurred and cannot be predicted

with any certainty.

However, the Sponsor believes the risk of loss under these arrangements to be remote.

Concentration Risk

Unlike other funds that may invest in diversified

assets, the Trust’s investment strategy is concentrated in a single asset within a single asset class.

This concentration maximizes the

degree of the Trust’s exposure to a variety of market risks associated with ether and digital assets.

By concentrating its investment

strategy solely in ether, any losses suffered as a result of a decrease in the value of ether can be expected to reduce the value of an

interest in the Trust and will not be offset by other gains if the Trust were to invest in underlying assets that were diversified.

Indemnification

Sponsor will not be liable to the Trust, the Trustee or any Shareholder for any action taken or for refraining from taking any action

in good faith, or for errors in judgment or for depreciation or loss incurred by reason of the sale of any ether or other assets of the

However, the preceding liability exclusion will not protect the Sponsor against any liability resulting from its own gross negligence,

The Sponsor will not be liable

to the Trust, the Trustee or any Shareholder for any action taken or for refraining from taking any action in good faith, or for errors

in judgment or for depreciation or loss incurred by reason of the sale of any ether or other assets of the Trust.

However, the preceding

liability exclusion will not protect the Sponsor against any liability resulting from its own gross negligence, bad faith, or willful

The Sponsor and each of its

shareholders, members, directors, officers, employees, affiliates, and subsidiaries will be indemnified by the Trust and held harmless

against any losses, liabilities or expenses incurred in the performance of its duties under the Trust Agreement without gross negligence,

bad faith, or willful misconduct.

Sponsor and each of its shareholders, members, directors, officers, employees, affiliates, and subsidiaries will be indemnified by the

Trust and held harmless against any losses, liabilities or expenses incurred in the performance of its duties under the Declaration of

Trust without gross negligence, bad faith, or willful misconduct.

The Sponsor may rely in good faith on any paper, order, notice, list,

affidavit, receipt, evaluation, opinion, endorsement, assignment, draft, or any other document of any kind prima facie properly executed

and submitted to it by the Trustee, the Trustee’s counsel or by any other person for any matters arising under the Declaration

The Sponsor shall in no event be deemed to have assumed or incurred any liability, duty, or obligation to any Shareholder or

to the Trustee other than as expressly provided for in the Declaration of Trust.

Such indemnity includes payment from the Trust of the

costs and expenses incurred in defending against any indemnified claim or liability under the Declaration of Trust.

Trustee will not be liable or accountable to the Trust or any other person or under any agreement to which the Trust or any series of

the Trust is a party, except for the Trustee’s breach of its obligations pursuant to the Declaration of Trust or its own willful

misconduct, bad faith or gross negligence.

The Trustee and each of the Trustee’s officers, affiliates, directors, employees, and

agents will be indemnified by the Trust from and against any losses, claims, taxes, damages, reasonable expenses, and liabilities incurred

with respect to the creation, operation or termination of the Trust, the execution, delivery or performance of the Declaration of Trust

or the transactions contemplated thereby;

provided that the indemnified party acted without willful misconduct, bad faith or gross negligence.

The Sponsor may rely in good faith on any paper, order, notice, list, affidavit, receipt, evaluation,

opinion, endorsement, assignment, draft, or any other document of any kind prima facie properly executed and submitted to it by the Trustee,

the Trustee’s counsel or by any other person for any matters arising under the Trust Agreement.

The Sponsor shall in no event be

deemed to have assumed or incurred any liability, duty, or obligation to any Shareholder or to the Trustee other than as expressly provided

for in the Trust Agreement.

Such indemnity includes payment from the Trust of the costs and expenses incurred in defending against any

indemnified claim or liability under the Trust Agreement.

The Trustee will not be liable

or accountable to the Trust or any other person or under any agreement to which the Trust or any series of the Trust is a party, except

for the Trustee’s breach of its obligations pursuant to the Trust Agreement or its own willful misconduct, bad faith or gross negligence.

The Trustee and each of the Trustee’s officers, affiliates, directors, employees, and agents will be indemnified by the Trust from

and against any losses, claims, taxes, damages, reasonable expenses, and liabilities incurred with respect to the creation, operation

or termination of the Trust, the execution, delivery or performance of the Trust Agreement or the transactions contemplated thereby;

that the indemnified party acted without willful misconduct, bad faith or gross negligence.

Subsequent Events

Trust has evaluated subsequent events and transactions for potential recognition or disclosure through the date the financial statements

were issued and has determined that there are no material events that would require disclosure in the financial statements.

The Trust has evaluated subsequent

events and transactions for potential recognition or disclosure through the date the financial statements were issued and has determined

that there are no material events that would require disclosure in the financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements